The UK is set to be one of the worst performing major economies in the world

The UK is set to be one of the worst performing major economies in the world this year, according to a forecast.The International Monetary Fund (IMF) says the UK economy's performance in 2023 will be the worst among the 20 biggest economies, known as the G20, which includes sanctions-hit Russia.It predicts the UK economy will shrink by 0.3% in 2023 and then grow by 1% next year.The IMF also warned of a "rocky road" for the global financial system.It follows the collapse of two US banks last month, closely followed by a rushed takeover of Swiss banking giant Credit Suisse by its rival UBS, which sparked fears of another financial crisis.The IMF had already forecast that the UK would experience a downturn this year and be bottom of the pile of the G7 - a group of the world's seven largest so-called "advanced" economies, which dominate global trade and the international financial system. The UK topped the group in 2022 during the pandemic rebound.Although the UK is forecast to have the worst economic performance this year, the IMF's latest prediction represents a small upgrade, from a previous forecast of a 0.6% contraction.IMF researchers have previously pointed to Britain's exposure to high gas prices, rising interest rates and a sluggish trade performance as reasons for its weak economic performance.Forecasts are made to give a guide to what is most likely to happen in the future, but they are not always right. For example, previous IMF forecasts picked up fewer than 10% of recessions a year ahead of time, according to an analysis it conducted of recessions around the world between 1992 and 2014.
Responding to the latest IMF's predictions, Chancellor Jeremy Hunt said: "Our IMF growth forecasts have been upgraded by more than any other G7 country.